Johansen'S: The New Scorecard System

15 Pages Posted: 30 May 2017

See all articles by Luann J. Lynch

Luann J. Lynch

University of Virginia - Darden School of Business

Jennifer Forman

University of Virginia - Darden School of Business

Graham Gillam

University of Virginia - Darden School of Business

Abstract

Johansen's has just completed its first year under a new scorecard system for evaluation of manager performance. The manager of Store 51 has traditionally been one of the company's top-performing managers from a financial standpoint, but his overall performance rating has declined due to performance along nonfinancial dimensions. The managers at the performance summit must discuss his performance in the context of a new performance evaluation system, measurement issues around the nonfinancial metrics, and retention concerns. An alternative version of this case, (UVA-C-2349) takes a less conventional role-play pedagogical approach to the same material.

Excerpt

UVA-C-2371

Mar. 17, 2016

Johansen's: The New Scorecard System

Jill Landon's palms were starting to sweat. It was the morning of Johansen's annual performance summit, and she was still unsure about what overall performance rating to give Jared Clark. It was clear from the data that he deserved the highest rating on the financial, strategy, and leadership initiatives on the new scorecard. But his performance this year in customer service fell far short of the level required by the guidelines in the new scorecard system. Based on the data, she did not think she could justify more than a “meets expectations” rating of 3 for Clark's customer service rating. As a result, she knew that Clark would be ineligible for the best overall performance rating of 5 and, subsequently, would not receive the maximum bonus possible. In fact, based on the new system, he would receive a lower bonus than he did last year if given a 4 overall this year (Exhibit 1).

Landon knew the importance of the company's new scorecard system. Although Clark's scorecard suggested that he should receive an overall rating of 4, the thought of giving Clark anything less than a 5 overall was difficult to stomach. Landon was Johansen's Southwest regional manager; and Clark had been her best store manager for a number of years. She had never seen another store manager who could deliver the financial performance that he could year after year. Landon's own annual performance evaluation was based primarily on the sales and financial performance of the Southwest region, performance that was affected greatly by what happened in Store 51; she was grateful for a manager like Clark, since her own future promotion and compensation prospects depended on continuing to turn in top results.

. . .

Keywords: performance evaluation, measurement issues, nonfinancial metrics

Suggested Citation

Lynch, Luann J. and Forman, Jennifer and Gillam, Graham, Johansen'S: The New Scorecard System. Darden Case No. UVA-C-2371, Available at SSRN: https://ssrn.com/abstract=2974089

Luann J. Lynch (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4721 (Phone)
434-243-7677 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/lynch.htm

Jennifer Forman

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Graham Gillam

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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